Palm's Treo falls foul of European pollution law

Palm has stopped shipping its latest smart phone to Europe because the devices don't comply with new European Union regulations that limit the acceptable amount of hazardous substances in electronics goods.

Palm stopped shipping the Treo 650 smart phone to Europe after June 30 to meet the requirements of the so-called RoHS Directive, said Andy Brown, Palm's chief financial officer, during a conference call last week to discuss the company's financial results. The directive went into effect Saturday.

The company decided nine months ago that it wouldn't update the product to meet the regulations. "We felt like the product was long in its lifecycle and to make that change at this point did not make sense," said Ed Colligan, Palm's president and chief executive officer.

Palm expects to ship a new smart phone to Europe later this year, Brown said. In the meantime, European operators that offer the Treo 650 have a stock of the devices to continue selling. The Treo 650 is the only Palm smart phone available in Europe.

The RoHS Directive was created by the European Union in an effort to reduce hazardous waste from electrical goods. RoHS stands for "the restriction of the use of certain hazardous substances in electrical and electronic equipment." Local organizations in each country are responsible for enforcing the directive.

Palm's strategy puzzled some analysts. The shipments are being stopped just as the Treo 650 is picking up momentum after promotions from Orange and O2, said Geoff Blaber, an analyst for IDC. At the same time, Palm recently decided to make two other new products, the 700w and the 700p, available only in North America.

"They chose to target North America, where the Palm [operating system] is strong, as opposed to really making Europe a priority, a region where they're really struggling," he said.

BlackBerrys and Symbian-based smart phones are currently more popular in Europe than Palm devices, and a potential lag between when the stock of Treo 650s runs out and the new product appears on the shelves won't work in Palm's favor. "The Palm OS has been struggling in Europe so an absence of Palm devices is not likely to help that cause," Blaber said.

Palm, however, says that it is just beginning its push into Europe in earnest. It recently opened an engineering facility in Dublin and is starting to better support the needs of European carriers and customers, Colligan said.

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